[Congressional Record Volume 159, Number 28 (Wednesday, February 27, 2013)]
[Senate]
[Pages S889-S892]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FISCAL POLICY
Mr. CORNYN. Madam President, I want to start with some numbers that
help put our spending budget debate in perspective.
Since President Obama became President of the United States, our
gross national debt has gone up by 56 percent--56 percent. Over the
next decade, unless we act responsibly, it is projected to rise by
another 57 percent and reach a staggering $26.1 trillion. I don't know
anyone who can actually comprehend numbers that big, but that is what
it is.
By comparison, the sequester--the much-dread sequester that is
supposed to go into effect on Friday--would cut only 2.4 percent out of
Federal spending for this next year. It would authorize $85 billion in
cuts for the current fiscal year, which, as I said, is only 2.4 percent
of the total Federal budget--2.4 percent. Yet the President is now
traveling around the country on Air Force One, telling us that a 2.4-
percent spending cut will have a catastrophic effect on our economy and
on jobs. Of course, this part is predictable: The only solution he
seems to offer is raising taxes once again.
We saw in December during the debate over the fiscal cliff--and I
know the American people must be getting nauseated with us lurching
from one financial crisis to another, with the fiscal cliffs,
sequestrations, debt ceiling, government shutdown threats. It is no
wonder the American people look at Washington and wonder: Can't you
guys get your act together? But the solution is not to keep on keeping
on and spending money we don't have and racking up more debt and
deficits, nor is the solution to continue to raise taxes on the very
people we are depending upon to invest in new jobs and grow their
current businesses to create jobs and opportunities for middle-class
families.
Rather than the nightmare scenario the President likes to talk about,
Republicans and Democrats would be happy to give the President and the
administration some flexibility in how it implements these 2.4-percent
cuts. Unfortunately, that doesn't seem to be what the President is
looking for. He doesn't seem to want to figure out how to manage these
cuts as every family and every small business in America who is left
with less income coming in the front door would have to do. He doesn't
seem to want to manage it; he seems to want to use this to scare people
in order to grow the size of government by raising more taxes. He seems
to believe that only Washington and only the Federal Government can
revive strong economic growth by steadily raising our levels of
taxation and spending. That is sheer fantasy. The President either
doesn't realize or he doesn't care that Federal spending levels are
already unsustainable. Everybody knows this. This is not a mystery to
anyone who has been paying attention.
For example, a single Federal program, Medicare, which our seniors
rely upon to provide them the health care they need, already has $37
trillion in unfunded liabilities; again, an astronomical number that I
doubt any of us can fully comprehend. But $37 trillion in unfunded
liabilities is big. America's total unfunded liabilities--this is all
the promises we have made which we have no current ability to pay for--
exceed $100 trillion. Meanwhile, the national debt keeps going up. It
is now roughly $16.5 trillion.
We are fortunate enough to now see interest rates that we have to pay
on that debt at a historically low figure, but each additional
percentage point of interest we would have to pay--if interest rates
were simply to go up to their historic norms--would increase the cost
of our service on that debt by trillions of dollars. Simply put, we
cannot spend our way back into prosperity.
There are things the Federal Government can and should do to boost
economic growth. We all understand this. The fact is the government is
not what creates jobs. It is the private sector, small businesses in
America, entrepreneurs, and the people who take a risk to start a new
restaurant or open a hardware store. Actually, those small businesses
are the ones that actually create many more jobs on a percentage basis
than do the large Fortune 500 companies.
All we have to do is look around the country, and I know the
Presiding Officer understands what is happening. We see some parts of
the country that are growing fast and where jobs are plentiful. One of
those is Texas, another one is North Dakota. There are some common
elements in our story that I will talk about in a minute, but for the
past 8 years ``Chief Executive'' magazine has ranked the best States in
the country to do business. I would not have brought it up if it were
not true, but the No. 1 State is the State of Texas. This week Forbes
ranked the 10 best cities for good jobs, and half of those cities were
in Texas--including Austin, Dallas, Fort Worth, Houston, and San
Antonio.
Texas has nearly 32 percent more jobs today than it did in 1995--32
percent. Over the same period the total number of jobs nationwide
increased by only 12 percent. I would think curious people would wonder
why. Our State accounts for 8 percent of the U.S. population, but we
accounted for almost one-third of all private sector jobs in high-
paying industries between 2002 and 2011. Let me say that again so
everyone is clear. Our State accounts for 8 percent of the national
population, but we accounted for almost one-third of all private sector
job growth in high-paying industries between 2002 and 2011. That is
remarkable.
Some might wonder what the secret is, and thank goodness the States
still are the laboratories of democracy where we can demonstrate the
policies that actually work rather than trying to mandate a one-size-
fits-all policy from Washington, DC, that doesn't work.
The secret in my State is that we have, for example, no State income
taxes. We are a relatively low income tax State, although people still
pay sales and property taxes. We have minimal and sensible regulations
because we know that not only do taxes depress economic growth, we know
government--either State government, local government, or Federal
Government--that issues punitive regulations can actually dampen
economic growth and job creation.
We also have a relatively low level of per capita government
spending. People don't come to Texas because they want handouts. They
come to Texas because they want an opportunity to work, to achieve, and
to live their dreams and in the process creating a lot of jobs and
opportunity for other people. We are also--and I know this is where the
Presiding Officer can identify with this statement--unapologetic about
harvesting our State's abundant oil and gas reserves. Indeed, Texas oil
production increased by 94 percent between September 2008 and September
2012. Shale gas is natural gas that is produced by hydraulic fracturing
and horizontal drilling. It has been around--actually fracking--for
roughly 60 years now. When done properly, it is safe and does not
damage the water supply. The shale gas now available due to horizontal
drilling and hydraulic fracturing has produced a shale gas revolution
in this country.
The truth is that if we get out of the way and sensibly regulate this
industry, open the Keystone XL Pipeline--which the President could do,
but he has not yet done--it would not only create thousands of new
jobs, it would create the potential for North American energy
independence. Imagine how that would change the geopolitics of the
planet. In instances where the Iranian regime threatens to shut down
the Strait of Hormuz and block 20 percent of the world's oil supply, it
would not have nearly the impact because our country would be North
American energy independent within a decade or so.
Well, I should also footnote the fact that down in Eagle Ford Shale--
which
[[Page S890]]
is south of San Antonio, and where I am from--they had some of the
highest unemployment rates in our State. Much like the Bakken Shale,
anybody who can get a commercial driver's license and pass a drug test
can earn a lot of money. As a matter of fact, commercial truckdrivers
in south Texas now can earn over $100,000 a year, and it is hard to
find workers. They were suffering a shortage of workers because of the
economic activity caused by natural gas exploration production.
The President should also reject misguided policies by the Federal
Government that are killing jobs and threatening to put many oil and
gas producers and refiners out of business. He should loosen
restrictions on Federal lands and offshore drilling, and he should
certainly issue more drilling permits. Expanding domestic energy
production and eliminating harmful regulations would promote job
creation and reduce unemployment, just as it has in my State.
In a larger sense, embracing this model would help the United States
gain much of its economic competitiveness and fiscal credibility that
we have recently lost. It would send a clear message that we are
serious about rejuvenating our economy and reducing our long-term debt
burden. Above all, embracing this model would show that Washington has
discovered our founding principles of limited government, individual
freedom, and personal responsibility.
I will close on this and say that I have not heard the President talk
recently about 7.9-percent unemployment in this country, nor have I
heard the President talk about the reduced number of people who are
actually still looking for jobs. That number would be much higher
because there are people who have lost their jobs and are still
actively seeking jobs. Notwithstanding that, we know from the
Congressional Budget Office that the unemployment rate will actually
get worse by the end of the year. This is very urgent. It is not just
about statistics; it is not just about numbers; it is about people who
are hurting because they are out of work and unable to provide for
their families.
One would think this would be a cause we could all come together on
and address to the best of our ability using some of the powerful
examples in States such as North Dakota and Texas.
I yield the floor, and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
The PRESIDING OFFICER. The Senator from South Dakota.
Mr. THUNE. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. THUNE. Madam President, we are hearing a lot of discussion here
in Washington and around the country this week about the so-called
sequester, which I think bears some explanation. Oftentimes we talk in
terms and in such a way that I think ordinary Americans have a hard
time understanding the arcane world and arcane lexicon we have here in
Washington, DC. Basically we are talking about these spending cuts--
across-the-board cuts--that will take effect at the end of this week.
It was a process that was put in place many months ago. In fact, if we
go back to the Budget Control Act, which passed in August of 2011, we
won't find very many people now who will claim paternity of that idea.
In fact, there is a big debate and a lot of finger pointing about
whose idea this was and whose fault it was that we are where we are. I
would simply point out that I think there are a lot of Republicans and
Democrats who voted for the Budget Control Act, so clearly many of us
voted in support of that as a last resort. Many of us didn't want that
to happen. We wanted to see a deal worked out where we would actually
address the major problems facing this country with regard to our
spending and debt. But since that couldn't be negotiated between the
President and the leadership of Congress, we ended up with this process
where we had some immediate spending cuts taking effect--about $900
billion, with another $1.2 trillion to follow--hopefully achieved
through reforms, including tax reform, entitlement reform, by a so-
called supercommittee that met and convened for a while. However, when
that committee failed to reach a conclusion, it set in process, set in
motion, what we know today as sequester.
It was actually built to go until the 1st of January, in which case
all of these things would take effect if nothing had happened. Clearly,
nothing had happened. So when January rolled around, we ended up with
this process we now know as sequester.
I wish to point out that the President has been running away from
this; somehow this just imaginarily appeared, this idea of sequester.
But if we go back and look at the origin of this, we see it was clearly
something the President and his people put forward. Fine points have
been laid out by Bob Woodward in his book and subsequent op-ed this
last weekend in which he stated very clearly this was an idea that
originated with the White House. In fact, Jack Lew, in his confirmation
hearing before the Senate Finance Committee, actually mentioned the
fact that when they were looking at something they could use--a
trigger, if you will--they drew upon the Gramm-Rudman-Hollings
agreement that was agreed to back in 1985 by the Congress, and that
incorporated this idea of a sequester, which included an across-the-
board spending cut. So, basically, it came from the White House. It
came from the President and his people. That is where the idea of
sequester originated. So to suggest now that somehow they didn't know
about this or they didn't have anything to do with it, that it isn't
their responsibility, is completely contradictory to the facts, as has
been delineated by Bob Woodward in his book and many others who are
familiar with those discussions.
The point, very simply, is we have a process that was put in place a
long time ago. We can go back to August 2011 when the Budget Control
Act was passed to find out why we are where we are today.
The other thing that is interesting to me, which I think has now
added to the narrative of trying to reconstruct the history of all
this, is the idea that somehow there should have been taxes
incorporated in this, that we needed to have a ``balanced approach'' in
the sequester. That was never contemplated. This was all on the
spending side. If we look at the history of this and we actually listen
to, again, the people who are familiar with those discussions--and Bob
Woodward, this weekend in his op-ed said: The President is moving the
goalpost. The revenues and taxes were not a part of this. But now, all
of a sudden, the White House is insisting upon: We want taxes to be a
part of this.
What is ironic about that is they got taxes. They got a big fat tax
increase on January 1 of this year. That wasn't balanced. There were no
spending cuts. That was all taxes: $620 billion. So from our
perspective, the tax issue has been dealt with. The President got
revenues--revenues that weren't contemplated by the sequester in the
first place. Yet, today, he gets up and argues that this needs to be a
``balanced'' plan, which is a euphemism around here for: We want more
of your tax dollars. We want more taxpayers' money to come to
Washington, DC. We want higher taxes. That is what that message is
essentially saying.
When the President and many of his allies on Capitol Hill say: We
want a balanced plan, that means they want tax increases--on top of the
$620 billion in new taxes the President got on January 1 of this year.
Now, what is interesting to me about this whole process is it was
reported this morning that the President has called a meeting on
Friday. He now wants to convene a meeting on Friday to talk about these
Draconian cuts that are going to go into effect, and he has been
traveling all over the country picking the most high-profile, highly
visible items he can that would suggest this is going to have this
profoundly dramatic impact on people around this country. So now he is
coming back to Washington. When? March 1. When is that? It is the day
the cuts are designed to go into effect.
Where has the President been for the last year and a half? Where is
the leadership in waiting until the very day these cuts are supposed to
go into effect to say: Oh, let's have a meeting to talk about what we
might be able to do to avoid the impact of these across-the-board
spending reductions.
[[Page S891]]
So March 1. OK, here we are, eleventh hour, once again, at the last
minute, the President sweeps in and says he wants to do something to
try to avert this sequester. But, again, remember: We have known about
this for a year and a half. This is not a new revelation. We have known
this was coming for a very long time.
The supercommittee failed to produce a result in November 2011. So it
is almost a year and a half now we have known the sequester is coming.
In fact, last summer we passed legislation in Congress that asked the
administration to give us some detail and some specificity about where
these cuts were going to take place, and we got some vague outline
about that. We didn't get any report from the President that enumerated
these because, frankly, I don't think they had gone through the process
of trying to figure out what they were going to do with it.
So here we are now 18 months later, at the eleventh hour, and the
President all of a sudden says: Let's have a meeting and talk about
what we might be able to do to avoid the impact of these across-the-
board spending reductions. Where is the leadership in that? Why weren't
we doing that 12 months ago, 11 months ago, 10 months ago, 1 month ago,
last week? Why weren't we talking about this earlier? Why do we have to
wait until the very last day to have a discussion about this?
Well, evidently, the President is better at campaigning than he is at
governing because he has been driving all over the country--I shouldn't
say driving, flying all over the country, over 5,000 miles--over 5,000
miles--campaigning on this issue to try to scare people into believing
that an $85 billion across-the-board spending reduction, which
represents 2.4 percent of Federal spending this next year, is somehow
going to be disastrous for our economy and for our country.
Frankly, I am not in any way diminishing the impact of spending
reductions. Spending reductions will have some impact--there is no
question about that--for sure. But to go out and say we are going to
have 90-minute lines at airports, and we are not going to have meat
inspectors, and all these things they are trying to put out there to
scare the American people, to dramatize and, frankly, to traumatize the
American people about a 2.4-percent reduction in overall Federal
spending?
Now, if a person is a member of an average American family or an
American business or anybody in this country, and they know they are
going to have 2.4 percent less to work with next year, what do they do?
They sit down around their kitchen table and figure out what those
things are they spend money on that they can live without. It is a
fairly simple exercise. In most cases, people are going to pick the
low-priority items. They are going to pick the things they can probably
live without. They are not going to pick the things they really need
and rely upon and depend upon. But I think most Americans would agree
they could find a 2.4-percent reduction in their annual spending if
they had to. I think that is something ordinary, average Americans have
to deal with all the time: Let's just tighten our belts a little bit;
let's figure out how we can get along with 2.4 percent less spending.
Well, we are talking about 2.4 percent less spending on a $3.6
trillion annual Federal budget. What does that represent? So $85
billion is a lot of money. It is a lot of money anywhere. It is a lot
of money in my State of South Dakota. In the small town I grew up in,
those are dimensions we didn't even contemplate in most cases.
But we think about it this way: $85 billion, the amount of money we
are asked to reduce in terms of the overall Federal spending this next
year, is the equivalent of how much our country borrows every single
month. Every 28 days, we borrow $85 billion. So every single month, we
borrow--we put on the backs of our children and grandchildren--as much
money as the Federal Government is being asked to live without for an
entire year: 2.4 percent of annual Federal spending.
To be fair, people will say: Wait a minute. It is not 2.4 percent
because it is just affecting a certain area of the budget, and they are
right. It will represent a bigger percentage simply because so much of
the budget has been walled off from this, the area where the real
Federal spending is; where three-fifths to two-thirds of all Federal
spending has essentially, for all intents and purposes, been protected
or insulated from this. There is a small 2-percent cut that would occur
in some of the mandatory areas of the budget, but for all intents and
purposes, what really drives Federal spending year in and year out and
what is going to represent, according to the Congressional Budget
Office, about 91 percent of all Federal spending 10 years from now--
Social Security, Medicare, Medicaid, food stamps; mandatory Federal
spending entitlement programs--that is pretty much walled off.
So we are increasingly shrinking the discretionary part of the budget
which represents a smaller and smaller portion of Federal spending each
and every year. But the reality is it still is 2.4 percent out of a
$3.6 trillion annual budget that we are talking about. So it seems to
me, at least, that all the hand-wringing that is going on in Washington
right now and all the drama the President is trying to create by flying
over 5,000 miles across the country, campaigning about the effects of
this sequester, really gets lost in what I think every American has to
deal with every single day and every single week and every single month
and every single year; that is, sometimes they have to make do with a
little bit less, and maybe Washington, DC, can figure out how to do
that.
But we have to ask the question again: Where is the leadership? The
President, on Friday, March 1--the day this happens--decides to have a
meeting when we have known about this for 18 months. The Senate, under
the leadership of the majority--the Democrats in the Senate--hasn't
passed a budget now for 1,400 days. We have gone 1,400 days without a
budget. We are going on 4 years without a budget. We spend $3.5
trillion, $3.6 trillion of the American taxpayers' money every single
year, and we haven't had a budget that suggests how we are going to
spend it now for going on 4 years. Where is the leadership?
The President of the United States submits a budget--which he will do
sometime soon. He has missed the deadline already, but we assume it is
coming in the next few weeks. But over the last couple of years when he
submitted a budget to Congress, when it was voted on in the House and
in the Senate, it didn't receive a single vote.
Now, it perhaps is not surprising it didn't receive a Republican vote
because it had a lot of tax increases in it, but it didn't get a
Democrat vote--zero, zilch--in the House or Senate. There wasn't a
Republican or a Democrat who voted for the President's budget. Why?
Because it wasn't serious. The President is not doing anything to
meaningfully address out-of-control spending and out-of-control debt.
So here we are. The Budget Control Act finally did put in place some
spending reductions, and now everybody is hyperventilating about what
we can do to avoid them. How can we turn this off? How can we shut off
the sequester?
I, frankly, believe we could do this in a much better way, a more
responsible way when it comes to the spending reductions. We ought to
do it in a way that doesn't put a disproportionate burden on the
defense budget. National security represents 20 percent of total
Federal spending, but it gets 50 percent of the cuts under the
sequester. That is not the way it ought to happen. I am all for--and
plans have been offered and twice passed by the House Republicans--to
replace this sequester with other--what we believe are more responsible
spending reductions. But that passed the House of Representatives; it
can't pass in the Senate.
The President has had no interest in looking at some alternative. The
only alternative he is interested in is the one that would do the most
harm and the most damage to the American economy; that is, more taxes.
If he gets taxes on this, if he gets taxes to turn off the sequester
like the taxes he got on January 1, it will not be enough because it is
never enough.
People who believe in big government and believe the way to solve
deficits is to raise taxes are never going to raise enough revenue. If
you do not address what is really afflicting our country--and that is
out-of-control spending--you have not done anything to solve the
problem, which the $620 billion tax increase on January 1 demonstrated.
The amount of money, the
[[Page S892]]
amount of revenue generated from that tax increase January 1 will fund
the government this year for less than a week--less than a single week.
This is not a revenue problem. This is not a tax problem. This is a
spending problem. It is time for some leadership. It is time for the
President to quit campaigning, to come back here, and to start
governing. But here we are--Friday, the day it is all set to take
effect--we have a $16 trillion debt. The Congressional Budget Office
says at the end of the next 10 years it is going to be $26 trillion. We
are adding $1 trillion a year. We are borrowing 40 cents out of every
$1 we spend. Revenues coming into the Treasury, according to the
Congressional Budget Office, are going up, actually; and by 2015 they
are going to be 19.1 percent of our entire economy, which is more than
a percentage point higher than the 40-year historical average.
Revenues are going up, and for the next decade, according to the
Congressional Budget Office, revenues will exceed, by about a
percentage point, the 40-year historical average. So revenues are
coming up to above historical averages, and yet we continue to run
trillion-dollar deficits as far as the eye can see.
Well, we have to get our spending under control. We have to get the
economy going again. The Republican staff on the Joint Economic
Committee put out a study that suggested if we had revenue growth like
we have had--average revenue growth--for the past 60 years, if we had
that in the past 4 years, the deficits today would be half of what they
are. That is the impact of economic growth. That is why growing at 1\1/
2\ to 2 percent is not enough. We have to grow at 3 to 4 percent. But
to grow at 3 to 4 percent, we have to have policies that promote
growth, that allow the economy to expand. We cannot keep piling on new
taxes and new regulations and making it more difficult and more
expensive for people who create jobs in this country to create those
jobs.
So the economy will continue to grow at a sluggish, anemic rate. We
will continue to have these high deficits, particularly if we do not
get our spending under control. It is about exercising fiscal
discipline and responsibility when it comes to our spending. It is
about putting policies in place that promote job creation and growth in
this country. That is what it is going to take to get this country back
on track. Yet the President is out campaigning around the country. He
comes back now at the eleventh hour, and on March 1 he decides to have
a meeting at the White House to talk about something we have known was
going to happen now for 18 months--18 months.
We have the most predictable crisis, according to the Simpson-Bowles
Commission, we have ever seen--the spending and debt crisis that is in
front of us. We have known about it for a long time. You can see it. It
is like a slow-moving train wreck out there. You are just watching it.
You just know it is going to happen, and yet nobody is doing anything
to turn off the engines.
It is high time we did that. I hope the President will engage. I hope
we will get for the first time now in almost 4 years, 1,400 days, a
budget in the Senate that puts a plan in place--a real plan, not a fake
plan, not a phony plan, not a plan that has a bunch of tax increases,
but a plan that actually addresses what drives Federal spending and
debt in a way that will put us on a more sustainable fiscal path and
ensure that future generations of Americans have a higher standard of
living, a higher quality of life than what previous generations have
had, not a lower and a less one. That is the path we are headed on
today if we do not change course.
Madam President, I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. BAUCUS. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________